CORRECT ANSWER C. WHEN THE COMMON SHARES OUTSTANDING INCREASE AS...

81. - CMA EXAM SUPPORT PACKAGE 2
CMA EXAM SUPPORT PACKAGE 2

81.

Correct answer c. When the common shares outstanding increase as the result of a stock

dividend or a stock split, retroactive recognition must be given to these events for all

comparative earnings per share presentations. Therefore, Ray Company would 1,000,000 shares

for computing earnings per share.